Business and management

Apple versus Samsung

Copy that

AFTER a jury in a federal court in California ruled on August 24th that Samsung had violated some of Apple’s patents, one wag online began referring to the South Korean company as “Samesung”. But for Samsung, the verdict is no laughing matter. As well as vindicating Apple, the jury awarded it $1 billion in damages—an amount that could be tripled because Samsung is deemed to have “willfully” copied some aspects of Apple’s wildly popular iPhone and its iPad tablet computer.

The outcome of the case will have significant repercussions in the tech world. For a start, it will encourage Apple to lob even more lawsuits at firms it believes are ripping off its intellectual property. It will also encourage other companies that make smartphones and tablets either to license patents from Apple or to modify the design of products to minimise the risk they will be hit with lawsuits too. And the whopping size of the damages will intensify the debate over whether or not America’s system for protecting innovations needs revamping.

Samsung has already made clear that it intends to appeal against the ruling, a process that could take months or, more likely, years. But legal experts think the chances of getting it overturned are slim. The jury concluded that the company had violated a number of Apple’s patents covering things such as a “rubber-banding” feature in its firm's operating system, which makes lists jump back when pulled beyond their limit, and a “pinch-and-zoom” feature which is now found in a wide range of mobile devices. It also upheld Apple’s claim that Samsung had infringed on its design patents by copying aspects of the iPhone's design, such as the system used to display icons.

At the same time, the jurors tossed out Samsung’s charge that Apple owed it money for violating several of its patents, including one that allows a user to listen to music in the background while carrying out another task on a device. On the same day that the American ruling came out, a court in South Korea that had been hearing a similar case between the two firms concluded that both were guilty of violating patents and banned some of their devices from being sold in the country. But because America is the world’s largest market for consumer electronics, the Californian ruling will have a far bigger impact.

The fight between the two companies had been brewing for some time and was a litmus test for Apple’s determination to thwart the progress of Android, a rival mobile operating system championed by Google and embraced by Samsung and a host of other mobile-device makers. (Gartner, a research firm, says that more than two-thirds of the smartphones shipped in the second quarter of 2012 were powered by Android.) Before his death last year, Apple’s co-founder, Steve Jobs, told his biographer Walter Isaacson that he believed Android had stolen important features from Apple’s iOS operating system and said he would wage “thermonuclear war” on it.

His successor, Tim Cook, who celebrated his first year at the helm of Apple on the same day that the court ruling came out, isn’t about to declare a truce. During the trial, the notoriously secretive American firm revealed details about its design process and put on the stand a couple of its most senior executives. It also crowed about the verdict. In a statement the firm thanked the jury for sending “a loud and clear message that stealing isn’t right” and said that the evidence presented in court “showed that Samsung’s copying went far deeper” than even Apple had suspected.

Samsung, unsurprisingly, had a different view of the outcome, describing the ruling as “a win for Apple, and a loss for the American consumer”. “It is unfortunate,” it added, “that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies.” The South Korean firm did, however, have a couple of consolation prizes: the jury found that its Galaxy Tab tablet computer had not copied the iPad’s design, as Apple claimed, and it refused to grant Apple the full $2.5 billion in damages it had asked for.

Robert Scoble, a tech pundit, has even argued that the outcome of the case could be seen as a victory for Samsung on the ground that the penalty is a small price to pay for copying stuff that has helped the firm become a powerhouse in mobile devices. But other experts have pointed out that Apple has a huge stash of patents that it is now likely to defend more aggressively. And it is bound to step up its efforts to have offending Android devices banned from sale. The firm has already asked for a preliminary injunction against Samsung to stop it selling the products that infringe on Apple’s patents in America. A hearing is set for September 20th.

As a result of all this, makers of Android devices will either have to fork out money to license Apple’s technology, which will push up the price of their gadgets, or alter the design of their products sufficiently to shield them from legal challenges. That could slow the roll-out of new devices in the short term. But it could also spark a new round of innovation in the long run, as firms in the Android ecosystem seek to differentiate their offerings to protect them from more legal strikes by Apple.

The case will also stir up further debate about the way America’s patent system operates. Its fans are already hailing the California ruling as proof that the patent system protects inventors and that its benefits outweigh the costs. But critics will seize on the ruling as evidence that the litigation frenzy and a proliferation of software patents are having a chilling effect on innovation, leaving society worse off. If Samsung pursues its appeal all the way through the America's legal system, the Supreme Court may end up having to decide which camp is right.

I think this is an incredibly sad verdict for consumers. Apple is looking more and more like a sulking child and Samsung is looking more an more like a company that has a jury verdict which is purely pro American.

Apple now have a mandate to strangle anyone who dare compete with them on their turf. The law suit should have been thrown out.

I think this is an incredibly sad verdict for consumers. Apple is looking more and more like a sulking child and Samsung is looking more an more like a company that has a jury verdict which is purely pro American.

Apple now have a mandate to strangle anyone who dare compete with them on their turf. The law suit should have been thrown out.

If Apple were making cars, others wouldn't be allowed to have cars with four wheels? And wheels wouldn't be allowed to be round? I am not a fan of Samsung, but this is just ridiculous. American juries, you have outdone yourself once again in your stupidity.

This verdict is at best a joke and at its worst a terrible travesty of justice. Can one seriously expect a Californian judge and jury sitting 20 miles away from Apple's global headquarters to deliver a verdict other than this? And when you add to that the fact that the company in question is the iconic face of America's technological soft power, is one of the biggest contributors to the wealth and prosperity of the local community in addition to being one of the largest employers around, there was no way the verdict could have been impartial.

Regardless of the merits of this particular case, I think it clear that intellectual property rights have run amok in America. In particular, far too many patents have been granted for obvious or generally known designs or processes.

Every Mac forum has this exact same line, "It's good because it requires people to innovate."

Rubbish.

It's called patent trolling and it's gotten out of hand. HP didn't sue Apple over their first tablet for the concept of a "touch screen device". I was using HP Pavilion tablets in 2007. Remember when Apple sued Microsoft over the "look and feel" of their competing OSs? It's stupid. I had a Compaq PDA that had a swipe to unlock applet in which you used a stylus. I wonder why Apple didn't retroactively sue HP's time-traveling IP thievery department. Hm....

Like other commenters have said, if Apple was a car company they would have sued (and won) a case against Kia for stealing "the concept of a metal box that travels on circular wheels". It's repugnant.

"makers of Android devices will either have to fork out money to license Apple’s technology"

License what technology? Other than the "rubber banding" interface feature, which is also hardly technology, do Apple really expect their competitors to pay to have a rounded rectangular white or black phone, with rounded rectangular icons?

I thought design couldn't be patented? And it's clearly not copyright infringement as it's not identical, and it's physical.

Samung have actually been fairly innovative. The key difference seems to be that western companies seem to innovate in design, and eastern companies in technology. All of the technology that went into the iPhone had already been created, mostly by Asian firms. Apple simply repackaged this in a more appealing way, improved the functionality, and provided a good interface (software and interfaces being what western companies are often known for). Samsung has done what Asian firms are well known for, improving the actual technology. The S3 is a beautifully slim, extremely powerful and capable phone. The iPhone 4S looks primitive in comparison, with about 40% of its height taken up by borders, and a chunky design.

Then just look at the Galaxy Note to see how Samsung are adding whole new modes of operation. And they don't claim to have invented the concept, they're simply reintroducing it, better.

This really is a bad result. US Patent law, and software patents are in a ridiculous state. Expecting a bunch of American laymen to judge a case between a "beloved" US firm and a Korean defendant objectively and fairly, with an understanding that most of these patents shouldn't even exist is ridiculous.

I used to like Apple when they were the underdog, and actually appeared to do good work. If they don't release a new game changing product soon, such as an iTV, they may well get written off as an MS after their prime, and an overly aggressive patent trolling control freak company that wants to own everything.

It is indeed ridiculous to patent a rectangle with rounded corners, but it goes deeper than that.You can no more patent "a metal box with wheels that you put fuel in, which takes you from point a to b" than "an arrangement of icons on a screen, aligned rectilinearly". Microsoft has had such an arrangement since Windows 3.0, and they stole it from someone else, and Apple stole it from Microsoft. Just opinion, and I'm no fan of MS. I just don't think that the judiciary is capable of making technical decisions about IP and how it is presented to a jury, who probably aren't equipped to do so either.

Obviously, without reading the court proceedings as well as the full guidance given to the jury it's impossible to say if the jury was "right" (nor to say if the judge's jury guidance was "right"). However as this judgement stands, it suggests that the protection given by design patents is probably excessive. The level of distinctiveness really ought to be greater to get such protection.

All monopolies should be viewed with extreme scepticism, and maintained only when there’s a clear public interest benefit. For information technologies, patents and design patents are rather too easily granted.

It is debatable whether Apple has won by a large margin: the damages awarded are less than half what Apple requested.

What is not debatable is the fact this billion bucks will not translate in discounts and lower prices for Apple products, nor Samsung will use the outcome of this ruling to favor consumers. Both companies have invested, and apparently are set on course to continue, much effort and funds in a sterile fight. One that certainly will not benefit customers, and will probably hamper further competition.

All other players will now need to take insurance, thus charging other prices, and they will also pay higher royalties to Apple and Microsoft...again adding even higher prices.

The South Korean sentence of the other day could have provided good inspiration: scold both Apple and Samsung with fines and orders to get products off the shelf until they learn to use common sense and make the market more efficient.

A nice positive twist would be for Apple to donate part of this money, or at very minimum invest it in real research, not in new legal fees.

The ideas are obvious when you are designing in the context of touch screen phones. The era of smart phones you are referring to were still using physical keys as their primary input method, and wouldn't have needed/benefitted from slide to unlock, rubber-banding, or inertial scrolling. And before someone says that companies copied the touchscreen phone, think about how silly it would be if they were to be patented. It would be akin to allowing a patent on laptops/portable computers.

It just seems ridiculous that you can sue for billions of dollars over such minor design details (almost as ridiculous as when Apple sued Microsoft for using GUI ). If patents were all enforced, everyone would be buried in lawsuits. It's one thing to copy technological innovation, but copying design ideas that are only logical is a slippery slope. Patenting ideas was intended to protect the intellectual property of the owner, but nowadays, it seems like it does more harm than good- hindering progress, improvement, and innovation.

Someone else invents multi-touch screens. You are tasked with integrating the camera software. How long would it take you to come up with the brilliant "idea" of using a "pinch" to zoom? If your IQ is above 60, it shouldn't have taken more than ten seconds. Indeed, it is so obvious that it is difficult to come up with a non-cumbersome alternative.

Virtually all of these patents are obvious and should have never been granted: pinch-to-zoom, rounded corners, grid-layout of icons, the bouncy effect when you scroll to the end, etc. USPTO needs to quit granting patents based on the logic of "We got our hands on a newly developed widget. We used it in obvious ways or combined it with obvious attachments. We claim these new ideas and a zillion variants."

What I don’t understand is that why a jury which is made of ordinary people is so capable of making decision when experts in the IT and legal fields had hard time deciding who is right/ who is wrong in a case as complicated as this? How do we know whether those jurors really understand the complexity of the issue?

It reminds me of the notorious silicone breast implant litigation. Even when the most brilliant medical researches could not prove silicone implants caused any medical problems, the jury of ordinary lay people repeatedly found the implant manufacturers guilty, which eventually led to chapter 11 bankruptcy of Dow Corning. In the mean time, silicone breast implants have become even more popular.

A US jury ruled for a US company. Too bad, because Apple is a US company in name only. It makes its products on the backs of Chinese slave labor, selling into the US market for a grotesque premium on the backs of ongoing fraudulent debt epidemic. Given that, more competition is better for the consumer. Ban software patents altogether, force these companies to compete solely on price and service. The enabling technology here is touchscreen and compact, low power memory. Not which way icons are arranged. Apple is an arrogant bully abusing the out of control patent system.

Fair enough....I am not so knowledgeable on thew matter.
The litigation strategy still makes me uncomfortale tough. It is bullysm in my book.
And also...how can someone patent a movement of fingers and a shape which existed before, I fail to understand